Request your Consultation
Posted on May 7, 2018 in Firm News
P – “P” stands for PROBATE, which is the legal process by which property passes from a deceased individual to his or her heirs. Unfortunately, the PROBATE process can take months, and even years (depending on the size of the estate and the number of challenges by potential heirs), and can be very costly, with legal fees potentially totaling tens of thousands of dollars. PROBATE is also a public process, which means your will, and what was left to every heir will become public knowledge. For some people, this may cause little or no concern, but for those who wish for their private affairs to remain private, a trust is often a better choice.
Q – “Q” stands for Q-TIP ELECTION. This option is frequently used for individuals who have remarried and have children from a first marriage. Essentially, the Q-TIP ELECTION establishes a separate trust for the benefit of the children or other class of final beneficiaries but allows the new spouse to receive the income earned by the Q-TIP TRUST for the remainder of their lifetime. The surviving spouse is also allowed to live in the home owned by the Q-TIP TRUST during his/her lifetime. Assets transferred into trust as a result of making a Q-TIP ELECTION will not be subject to estate tax until the second spouse passes away. Of course, taxes will only be due if the value of the property in the Q-TIP TRUST added to the surviving (new) spouse’s assets at the time of their death exceeds the exempt amount then allowed under the Tax Code.
R – “R” stands for REPORT. It is vital to the effectiveness of your estate plan that you report any changes in your circumstances to your estate planning attorney. These include: the purchase or sale of real property; a marriage or divorce; the birth of a child or grandchild and so forth. Failure to amend your estate documents in light of any of these events can have a significant impact on the overall plan.
To Be continued…………